defense. and yet, we do nothing. i strongly believe we should pass this bill. it's a step along the way. clearly, it will go to the house. clearly, there will be a conference. in order to get something, there will be some accommodations made. there is no reason for this senate knowing what we know not to pass this bill. we also know the president would sign a bill like this. and we know the president would not sign the house bill as is. so we have an opportunity to make the changes. i want to remind my colleagues of efforts made to negotiate an agreement on this bill. before the bill came to the floor in july, and while the senate was considering it, there were numerous meetings every day by a dozen or more

senators. the authors of the bill met with senators mccain, chambliss, hutchison. the sponsors of the secure i.t. act as well as with senators kyl and whitehouse and a group they convened. we had multiple meetings with the chamber of commerce. the chamber's largest concern was over the liability protections in our information sharing language, which is what i had something to do with, and the intelligence staff worked on and prepared. i asked where they thought our language was deficient. i asked them if they could improve on the immunity provisions, please send us bill language. did they? no. they did not. i think that is some testimony that's worth thinking about it. the majority leader offered to vote on a set list of amendments. he asked if the minority would put together the ten votes it

wanted. as long as they were relevant and germane to the bill. and we'd go through them. no list was provided. and so we voted by a vote of 52-46 and cloture was not invoked. again, after the vote, the staff from both sides of the homeland security committee, the commerce committee, the intelligence committee held numerous meetings to negotiate a compromise. the effort did not succeed. so if we're to address the major problem of cyber attacks and potential cyber warfare, we have no option but to bring the lieberman-collins bill back on the floor. mr. president, i know my time is limited. i know the nation's cyber laws are woefully out of date. i want to also just touch on one thing. i received a call on the information sharing part of this bill about the homeland security

portal or change. -- exchange. and that c.e.o. said we would like our information to go directly into the various defense companies. that creates a big problem. it created a problem with a number of united states senators who are concerned about the military getting private information, it created a big concern with the privacy organizations throughout our country. and so it was changed so the portal be run most likely by homeland security. but here's the point i want to make: the transfer of information is with the click of a mouse. it moves instantaneously so as information --. the presiding officer: the senator's time has expired.

mrs. feinstein: may i ask unanimous consent to have one minute to conclude? the presiding officer: is there objection? without objection. mrs. feinstein: thank you very much. so as information comes in, it goes instantaneously into the correct area. the c.e.o. said i didn't that, thank you, i have no problem with that. so i would ask -- you see, i really think disagreeing with some aspects of this bill isn't that important. we're never going to do the perfect bill without experience. the bills are going to have to be changed and amended as time goes on. but i think passing a bill is important. i think to leave this country vulnerable, not to pass a bill because somebody doesn't like this or that is negligent, it is irresponsible, and god forbid if we have that major pearl harbor that secretary panetta referred to. so i urge my colleagues to pass this bill.

i thank the chair for the extra extra time. i yield the floor. a senator: mr. president? the presiding officer: the senator from georgia. mr. chambliss: senator grassley who is next has been kind enough to give me 30 to that 45 seconds. i appreciate that. mr. president, july and august when the cosponsors of both the underlying bill, the lieberman-collins bill and the secure i.t. bill which i am a cosponsor of plet meth regularly and i was hopeful we could resolve the significant differences between these two bills. unfortunately, we did not reach an agreement even though we had been promised an open amendment process on this underlying billing bill, the majority leader has once again filled the tree and filed for cloture. i voted against cloture in august and, unfortunately, nothing has changed since then. so i'm compelled to do the same thing today. we all understand the serious threat that is facing our country from cyber attacks and intrusions but that does not mean that congress should just

pass any bill. frankly, the underlying bill is not supported by the business community for all the right reasons. and they're the ones that are impacted by it, they're the ones that are going to be called to comply with the mandates and the regulations and frankly, it is just not going to give them the kind of protection that they need from cyber attacks. so i regret to stand up today and say that i intend to vote against cloture on bill. i yield to the senator. the presiding officer: the senator from iowa. mr. grassley: we're again discussing this very important topic of cybersecurity. it's a topic that we all agree is of utmost importance and worthy of our attention. unfortunately, this is a little bit like the movie "groundhog day." the majority continues to push the same flawed legislation that failed to garner enough votes

for consideration just three months ago. no one disputes the need for congress to work on the issue of cybersecurity. however, members do disagree with the notion this problem requires legislation that increases the size of the federal government broke and at the same time -- bureaucracy and 25eu789 taiment places new regulations on business. enhancing cybersecurity is important to our national security. i support efforts to strengthen our nation against cyber attacks. however, i take issue with those who have come to the floor and argued that those who don't support this bill are against strengthening our nation's cybersecurity. as i said, in august, disagreements over how to address policy matters shouldn't

devolve into accusations about a member's willingness to tackle this tough issue. the debate over cybersecurity legislation has turned from a substantive analysis of the merits into a political blame game as to which side supports defending our nation the more. if we want to attack big issues like cybersecurity, we need to rise above disagreements and work in a constructive manner. disagreements over policy should be openly and freely debated. unfortunately, this isn't how the debate on cybersecurity proceeded. instead, before a real debate began last august, the majority cut it off. this was contrary to the majority's promise earlier this year of an open amendment process to address cybersecurity.

aside from process, i also have significant substantive concerns about the bill. chief among my concerns with this pending bill is the role played by the department of homeland security. these concerns stem from oversight that i've conducted on the implementation of a program called chemical facilities antiterrorism standards. we call that acronym cfas for short. it was the first foray into regulation of the chemical sector. homeland security spent nearly half a billion dollars on the program. five years later, they've just begun to approve site security plans for more than 4,000 facilities designated under the rule. i've continued to conduct oversight on this matter despite assurances from homeland security that they fixed all the

problems with cfas, i keep discovering yet more problems. on top of this concern since the last vote in august, the chairman and ranking member of the senate permanent subcommittee on investigations have released a report criticizing homeland security and the fusion centers that they operate. the subcommittee report criticized homeland security's fusion center as -- quote -- "pools of ineptitude, waste, and civil liberties intrusion" -- end of quote. and that's the evaluation after homeland security spent as much as $1.4 billion on the program. given these examples, i'm baffled why the senate would take an agency that has proven problems with overseeing critical infrastructure and give them chief responsibility for

our country's cybersecurity. additionally, i'm concerned with the provisions that restrict the way information is shared. the restrictions imposed under title 7 of the bill are a step backward from other information sharing proposals. this includes the bill that i've cosponsored, the secure i.t. bill. the bill before us places homeland security in the role of gatekeeper of cyber threat information. the bill calls for homeland security to share the information in -- quote -- "as close to real time as possible" -- end of quote with other agencies. however, this will create a bottleneck for information coming into the government. further, title 7 includes restrictions on what types of information can be shared, limiting the use of it for criminal prosecutions except those that cause imminent harm.

this is exactly the type of restriction on information sharing that the 9/11 commission warned us about now ten years ago. the fact -- in fact, the 9/11 commission said -- quote -- "the wall resulted in far less information sharing an coordination" -- end of quote. the commission further added -- quote -- "the removal of the wall that existed before 9/11 between intelligence and law enforcement has opened up new opportunities for cooperative action" -- end of quote. why should we even consider legislation that could rebuild these walls that threaten our national security? we haven't had any real debate on these issues. the lack of process, real process in the senate on this current bill amplifies my substantive concern. in fact, this is eerily

reminisce sent of the debate sounding obamacare. here we are gonzales once again in a lame-duck session the week before thanksgiving tackling a serious problem that hasn't been giving the benefit of the senate's full process here on the floor of this body. i don't want security legislation to become another obamacare. if we're serious about our nation's security, shouldn't we treat it as the serious matter we say it is? additionally, the staff of the sponsors of the legislation before us continue behind the scenes effort to negotiate changes to the bill that we're asked to vote on. if the bill's sponsors are still negotiating changes, why don't we have the benefit of the full and open amendment process to try and fix it before we vote for cloture? it simply doesn't make sense. instead, it appears today's vote is about something other than cybersecurity. it's yet another attempt by the majority to paint the minority

as obstructing the work of the united states senate. most likely this vote will be used simply as fuel for the majority's effort to dismantle unlimited debate in the united states senate. so much for tackling cybersecurity without putting politics into the mix. this isn't the way we're supposed to legislate. how many senators are prepared to vote on something this important without knowing its impact because we haven't followed regular order? are we to once again pass a bill so that the american public can then read it and find out what's in it? these are questions that all senators should consider, and our citizens should know in advance what we're actually considering. if we're serious about addressing this problem, then let's deal with it appropriately rushing something through that will impact the country in such a massive way isn't the way that

we should do business. it's not good for the country, and it's not good for this body. i yield the floor. a senator: mr. president? the presiding officer: the senator from texas. ms. hutchison: how much time is remaining on our side? the presiding officer: 20 minutes. mrs. hutchison: thank you. are there other -- are there other speakers on -- let me just say to notify me when there are ten minutes left in case senator collins comes or someone else. so i would like to have up to ten minutes and be notified. mr. president, i rise to speak against revoting this cloture and the main reason is that we are not going to be allowed to have amendments. that is unacceptable because though we have worked diligently with the sponsors of the

cybersecurity bill on the floor, a number of ranking members of the relevant committees that have jurisdiction over cybersecurity have an alternative bill, the secure i.t. act, that we would like to be able to put forward as an alternative or have an amendment process that would allow our approach to have a chance to prevail anyway. now, we're aware that the president is signaling his intention to issue an executive order, but an executive order is not sufficient to really give the encouragement and the protection to the companies in the reporting lines to allow them to share information with other companies that might have the same type of threats in the same industry area or with the federal government.

and i'm sorry that we're not going to be able to have amendments that would allow us to perfect this bill. let me say that the proponents of h.r. 3414 being knowledge that is important to have a collaborative effort for the businesses that run almost 90% of our nation's networks and the federal government and we agree with that, which is why we have worked with the private networks and the companies that run them to fashion a bill that would give them immunity if they share information and give them the direct reporting capabilities to go directly to the defense agencies. because we believe that the agencies that regulate the communications and the military industrial base programs would have more of an understanding of

the needs and what can be done to launch a counterattack in a direct way. the bill that is on the floor, however, requires everything to go through the homeland security department. and those of us who are supporting securit believe that it should be a direct reporting requirement to the agency of regulation or to the defense agencies. the sponsors of our bill are the ranking members of eight subcommittees and committees that have jurisdiction in this area. senators mccain, chambliss, grassley, murkowski, coats, burr, johnston and myself. and we believe that the consensus items in our bill are preferable to the bill that is before us that we are not going to be allowed to amend. the securit offered the balanced

approach that will significantly advance cybersecurity in both the public and private sectors. first, to facilitate sharing of cyber threat information between the private sector and government, allow the reporting to go to the defense agencies where the response can be direct, not filtered through homeland security. secondly, it gives liability immunity for sharing among the industries that might be affected as well as the defensive actions that are taken. this is essential. because you even need antitrust immunity if you are going to share vital information on this issue so that you're not going to get sued for collaborating with a competitor. and it is in our country's interest and i think our private companies want the ability to secure all of our networks because we know that this is a real threat.

secure i.t. has the overwhelming support of the network operators that are trying to gear up to defend against cyber threats. because it will help their members pret their networks, we have the endorsement of the u.s. chamber of commerce. and i would ask unanimous consent to submit the letter from the chamber of commerce dated november 14 of this year for the record. the presiding officer: without objection. mrs. hutchison: and the national association of manufacturers, the american fuel and petroleum manufacturers, the american petroleum institute, u.s. telecom, national retail federation, financial services round-table, internet security alliance, and the ctia, the wireless association. we can come together to pass the areas of secure i.t. that would allow better cooperation and also a -- a reporting

relationship that they understand and know they will be able to defend against the cyber attacks with. we believe it is a superior bill and would like the ability to amend the bill on the floor to perfect it so that we could send a bill to the house. if we are not able to get this bill this year, certainly i hope it will be started again with all of the relevant committees during the markups, doing the discussion that is required for a bill of this magnitude. many of the committees did not have markups, they did not have input into the bill until it was introduced. the committee process does work when we're able to use it, and i hope that we will be able to go back to the drawing boards or if the majority would allow amendments down the road, if we

have the time later this year, we would love to continue working with the sponsors of the legislation to see if we could come up with the amendments to which everyone could agree. it's been a tough road. we've all tried hard. i think the sponsors of the bill are sincere in wanting to improve the systems. the ranking members that have cosponsored the secure i.t. who also have jurisdiction of this area also are sincere. and i hope that we can come together hopefully later this year but, if not, certainly in the new year with the new session. let's start from the beginning and go through all the committees of jurisdiction so that there can be a real consensus and a give-and-take. so, mr. president, i thank you, and i yield the floor. a senator: mr. president? the presiding officer: the senator from connecticut. mr. lieberman: mr. president, i ask unanimous consent to speak for up to one minute and not have the time taken out of the republican side.

the presiding officer: is there objection? without objection. mr. lea lieberman: mr. presideni want to respond to the concern of my friend from texas that if cloture is granted on this motion to proceed, that there will not be an opportunity to amend the bill. i understand why she's saying that but i do want to say that senator reid has made clear i think twice today that if cloture is granted, he is open to -- he will allow amendments. he's said that he can't allow endless amendments because we're in a lame-duck session with limited time, but that he's -- he will allow a finite number of amendments, if you will, on both sides. so i want to assure my colleagues that -- and appeal to my colleagues to vote to at least take this measure up. i mean, the cyber enemies are at the gates. in fact, they've already broken through the gates. and the least we can do is debate and vote on amendments to determine how we can strengthen our cyber defenses. i thank my colleagues, and i yield the floor.

the presiding officer: the senator from maine. ms. snowe: thank you, -- ms. collins: thank you, mr. president. first let me thank the senator from texas for reserving some time for me while i was at a briefing and on my way to the floor. i will attempt to be very quick because i know our colleagues are eager to vote on this important issue. and, mr. president, that is my point. this is a critically important issue. how many more warnings do we need to hear from the experts that we are extremely vulnerable to a cybersecurity attack? cyber attacks are happening every day. just recently there was an attack on several of our financial institutions.

according to press reports, it was launched by iranian sources. we know that iran, russia and china are extremely active in probing our cyber systems, including those that control our critical infrastructure. not only our financial systems, our transportation systems, our water treatment plants, but also our electric grid. recently, we have seen what hurricane sandy, the superstorm, has done to states, so many states, destroying lives and property and leaving people without power for days on end. well, multiply that many times, mr. president, if it were a deliberate cyber attack that knocked out the electric grid

along the entire east coast. that's what we're talking about. that is the kind of risk that calls us to act. we have heard from the experts over and over again that this vulnerability is huge and escalating. we know that the number of cyber attacks that have been reported to the department of homeland security has increased by 200% in just the last year. and those are just the -- the attacks that have been reported. that's just the tip of the iceberg. undoubtedly, there are many more on our critical infrastructure that have not been reported. we know that there have been attempts to probe the security of the computer systems that run

some of our natural gas pipelines. this problem is very real and it is not only a threat to our national and homeland security, it is also a threat to the economic prosperity of this country. how many more thefts of research and development, of intellectual property, of businesses right here in our country that are providing good jobs for americans do we need to endure before we act to secure our cyber systems? mr. president, i have worked on the cybersecurity bill for years with my friend, colleague and chairman, joe lieberman. we have held countless hearings. we have marked up a previous

bill. it's so ironic that we're being criticized for not doing yet another markup on this bill when all of the changes reflect our attempts to address the criticisms of the opponents of this bill. we made a huge change by making this bill voluntary rather than mandatory and by providing incentives, such as liability protections for businesses that voluntarily agree to adopt cyber standards. we've created a system where there would be a cooperative process between the public and the private sector to share information and to develop the best practices so that that information can be shared. in all the time that i have

worked on homeland security issues, i cannot think of another threat where our vulnerability is greater and where we have failed to act and to have done less. mr. president, this isn't a republican or a democratic or an independent issue. the experts, regardless of their political leanings, from the bush administration to the current administration, have urged us to act, have pleaded with us to act. general alexander, the nonpartisan general who is the head of cyber command and the head of the national security agency, has urged this congress over and over again to give this administration, to give our country the tools that it needs

to protect critical infrastructure and to help safeguard our economic edge. mr. president, i urge our colleagues to listen to the wisdom of former homeland security secretary mike at chertoff and -- michael chertoff and former n.s.c. chief michael hayden. from the previous administration, from president bush's administration. they wrote the following: "we carry the burden of knowing that 9/11 might have been averted with the intelligence that existed at the time. we do not want to be in the same position again when a cyber-9/11 hits. it is not a question of whether this will happen; it is a question of when."

end quote. mr. president, this time all the dots have been connected. this time we know that cyber attacks are occurring each and every day. this time the warnings are loud and clear. how can we ignore these dire warnings? how -- how can we fail to act on the cybersecurity bill, especially since the majority leader has indicated that he is willing to allow for amendments, as he should, to make this process fair. germane amendments would be allowed. so i urge our colleagues to heed the warnings from the experts

and to vote for cloture on the cybersecurity bill so that we can proceed to its considerati consideration. i don't want to be here a year from now saying, why didn't we act? why didn't we listen to the cyber experts from the bush administration, from the obama administration, from general keith alexander, the premiere expert in our government? thank you, mr. president. i yield the floor. the presiding officer: the senator from delaware. mr. carper: i ask unanimous consent to speak for one more minute, if i could. the presiding officer: is there objection? without objection.

mr. carper: this is the first opportunity we'll have had since returning from the election to cast a vote on a meaningful piece of legislation, and as legislation goes, it is about as meaningful as any we're going to come across for a while. if we were in the minority and the republicans were coming to the floor and asking us to support moving to a bill so that we could offer -- so that we could debate it, offer amendments to the bill, i would hope that we would do that. for our republican friends who are fearful that they're not going to have a chance to offer those amendments, senator lieberman, the chairman of the committee, the ranking republican, susan collins, myself -- all cosponsors of the bill -- we will work very hard to make sure that any amendments that are relevant and germane to the bill can be offered and can be debated. we worked a similar process with the postal bill. we understanded up having 50-60 amendments. they weren't all germane. but in the end everybody had a

chance to be heard and to offer their amendments. some of those amendments were not relevant or germane. as long as amendments are relevant and germane to this legislation on cybersecurity, we will work very hard to make sure folks have their opportunity to be heard and to vote on their proposals. thank you very much for letting me speak. ms. collins: mr. president, though we have different views on this issue, i would yield -- how much time do you -- i would yield one minute to the senator from alex -- from arizona, senator mccain. mr. mccain: mr. president, i would like to express my appreciation for senator lieberman and senator collins' hard work on this. we have had some disagreements. i still believe that if we could have, say, five amendments that could be voted on and debated, i think we could move forward with this bill. i really believe that.

and i would like to see if possibly even after -- right after this vote if we could reach some agreement between the leaders and ourselves that we could say that there would be five pending amendments and perhaps we could go ahead and debate and vote on those. i, again, think we have some very significant differences, but i -- the fact that the chairman and the two cochair -- whatever the hell they call themselves -- have worked incredibly hard on this issue, and they deserve debate, and i hope that they would understand that we are seeking, like, five amendments. mr. lieberman: mr. president, i ask unanimous consent that just in the remaining time, i really appreciate what my friend from arizona has said, and i not only join him in that request, but i'm confident, because i've talked to senator reid about this, and he said that if we invoke cloture tonight, he will allow a finite number of

amendments. he said -- i don't want to encourage anybody. he said, not 15. i took that to be some number less than 15. and i think five amendments is well within the termify" finite" so i would ask my colleagues, give it a chance, and let's vote for cloture on this. and i am a sure senator reid will allow five amendments. the presiding officer: the clerk will report the motion to invoke cloture. the clerk: motion to proceed motion to proceemotion to invokn to invoke cloturcloturemotion: we, the undersigned senators, in accordance with the provisions of rule 22 of the standing rules of the senate, do hereby move to bring to a close debate on signed by 17 senators. the presiding officer: the mandatory quorum call has been waived. is it the sense of the senate that debate on s. 3414, a bill to enhance the security and

resiliency of the cyber and communications infrastructure of the united states shall be brought it a close? the yeas and nays are mandatory under the rule. the clerk will call the roll. vote:

vote:

vote:

the presiding officer: on this vote, the yeas are 51, the nays are 47. 3/5 of the senators duly chosen and sworn not having voted in the affirmative upon reconsideration, the motion is not agreed to. the majority leader. mr. reid: mr. president, if you could direct the senate to be quiet. the presiding officer: the majority leader is correct. the senate is not in order. please take your conversations from the well. the majority leader. mr. reid: mr. president, the bill that was -- that was and is most important that sends the money to the pentagon was just killed, and that's cybersecurity. mr. president, i have had a number of people come to me during the day and said are you going to allow relevant amendments on this? i said sure. they said how about five?

i said fine. but, mr. president, whatever we do on this bill, it's not enough for the chamber of commerce, not enough. so everyone should understand cybersecurity is dead for this congress. what an unfortunate thing, but that's the way it is. the sportsman's bill, mr. president, i filed cloture on this bill yesterday. unless we can agree to a limited number of amendments, we'll have cloture vote on the bill early tomorrow morning, probably around 9:00. if we get cloture, there will be a potential 30 hours for debate. under the rules as we all know too well. i have been told that some on the other side also plans to make a budget act point of order against the sportsman's bill. we have members representing the states of new york and new jersey who are going to be in their states tomorrow because of the tremendous damage caused by

sandy, but they will be back here tomorrow evening, and we'll vote in the morning on cloture on the sportsman's bill, and then we could have votes later tomorrow or on friday. d.o.d. authorization. i don't see senator levin here. senator levin is here. senator mccain was here earlier. i have had conversations with senator levin. i haven't spoke to senator mccain this week, but i spoke to him previously on a number of occasions. this is a bill we should get done. it's an important piece of legislation. i know we have the defense appropriation bill at a later time, but, mr. president, this is something we have to do now because it changes policy toward our fighting men and women around the world. it does a lot of good things for them. we need to get this bill done, i repeat.

probably what we're going to do is move to the bill. i don't know why in the world we have to file cloture on a motion to proceed to it. i don't quite understand that, but i haven't understood that about almost 400 times in the last few years. so what we're going to do is -- everyone should understand, listen to this, everybody. we're going to move to the bill. if we get permission to move to the bill, we'll have an open amendment process on this bill. i have been assured by senator levin and mccain through senator levin that they -- all these nonrelevant amendments, they will help us table them or dispose of them in some appropriate manner. that's how we should legislate around here. so i hope that senator mccain, after speaking to senator levin, will agree to move forward on this bill, and that's my proposal. i hope it is something that everyone would agree to. we will start legislating on

this bill the day we get back after the thanksgiving recess. mr. carper: would the majority leader yield for a question? mr. reid: yes. mr. carper: i am very much couraged, mr. leader. you say you would be most willing to allow the minority to offer amendments, relevant, germane amendments to the cybersecurity legislation. literally in the last 30 minutes we have had on the floor leaders saying this, and i have heard them say it before, saying a limited number of relevant amendments. senator mccain came to the floor, as you know, has not been real anxious to support the bipartisan legislation developed by senators lieberman and collins and others, but we have had the antagonists to that legislation. the majority leader saying five, five amendments is relevant for the minority to be able to offer. we could at least take up the bill, debate the bill, and at the end of the day, you still

need 60 votes to get the bill off the floor. i have heard so many of our colleagues say it's not an annual of if but it's when. i don't want us to leave here and go home for thanksgiving and leave this hang federal government we could actually do something relevant. mr. reid: mr. president? the presiding officer: the majority leader. mr. reid: just so everyone listening to my friend who has worked so hard on the bill that was just killed, understand what he he's talking about it's not a question of if, it's when, he is not talking about passing this bill, he's talking about a cyber attack, a garr ganttious tieb cyber attack on our country. we're in this beautiful capitol building today. all around america, we have government officials and private sector officials who are trying to thwart, the people are trying to destroy their businesses and parts of our country, infrastructure. but i have said here so many different times, senator lieberman spoke, senator feinstein is on the floor, the

chairman of the intelligence committee, the record is here. we have told everybody for months, months something's going to happen, and we have laid the groundwork, i'm sorry to say, to blame you guys for not doing something to take care of this issue. it's a big issue. it's an important issue for our country. this should have nothing to do with partisan politics. why the chamber of commerce is doing what they're doing is beyond my ability to comprehend. i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. mr. grassley: mr. president? the presiding officer: the senator from iowa. mr. grassley: i have asked for the opportunity to speak now. the presiding officer: the senate is in a quorum call. mr. grassley: i ask the caution of the -- calling of the quorum be suspended. the presiding officer: without objection. mr. grassley: mr. president, before i go to the reason i come to the floor, which is a department of defense matter, i would like to thank several of my colleagues who earlier this

afternoon recognized me for casting the 11,000th vote yesterday, and so i want to acknowledge the fine things that senator reid, the majority leader said, senator mcconnell, the republican leader said, senator stabenow, senator harkin and senator leahy, and i want to -- them to know that i appreciate very much the recognition that i got. i hope it's nothing special because i hope i am just exhibiting the work ethic of iowans generally, which i think are very -- work very hard. and if i could, if it's not impossible, i'd like to place what i just said in the record after the majority leader spoke. the presiding officer: without objection. mr. grassley: thank you. i meant the majority leader when he spoke at 2:30.

the presiding officer: without objection. mr. grassley: mr. president, i'm getting the runaround from the inspector general at the department of defense, and my remarks which are fairly lengthy will be connected with that problem i'm having. with sequestration looming on the horizon, congress needs a truly independent department of defense audit oversight capability. we need it to root out waste. as my friend from oklahoma, senator coburn, knows all too well, rooting department of defense waste is no easy task. his new report identifies some excellent examples of waste ready for removal. i commend senator coburn for outstanding work. instead, stand ready to help him. but to successfully root out waste day in and day out, there

must be a top-notch audit quality and capability in the hands of an inspector general who is ready and willing to use it effectively. mr. president, i am reluctant to say this, but it needs to be said. i fear and i suspect that the independence of the inspector general's audit capability may have been compromised. i say this because of the story that i'm about to tell. this story is about a difficult audit where the inspector general apparently got bad case of weak knees and caved under pressure. the inspector general dropped the ball on an audit that should be a critical component in secretary panetta's good-faift effort to bring the department -- the defense department into compliance with the chief financial officers

act. today the department of defense is the only federal agency that cannot pass the test, so secretary panetta turned up the pressure. he wants to move the audit readiness date up to no more than three years from the congressionally mandated date of 2017 to 2014. this is a daunting task which i spoke about here on the floor almost 12 months ago now on december 11 last year, and i say it's a daunting task because there is a big loophole in -- pothole in the road that the secretary faces and may not know about. hence, the reason i'm speaking. the kingpin of this initiative, the department's flagship accounting agency known as the defense finance and accounting service may not be ready to

produce credible financial statements. it claims to have earned a clean opinion, yet when its financial statements were put under the inspector general's microscope, they were found to be very lacking. they did not meet the prescribed audit standards. to make matters worse, far worse, all the evidence suggests the inspector general may have quashed this negative audit report, allowing the charade to continue unchecked. this oversight failure could leave a gaping hole in secretary panetta's master plan. except for the corps of engineers, the defense finance and accounting service handles all the department's financial transactions. it should be the foundation of secretary panetta's initiative. it was created over 20 years ago to clean up the department's financial mess.

it should be exerting leadership in this arena and showing the rest of the department how to balance the books. its audits need to be as clean as a whistle. if the department's central accounting agency can't earn a clean opinion, then who can earn a clean opinion? today, the central accounting agency's claim of a clean opinion may be hollow. the inspector general who is responsible for making those judgments rejected that opinion. the inspector general reviewed it and conclude thad it did not pass muster. unfortunately, the inspector general dropped the ball and quit before the job was done. the inspector general's report known as a nonendorsement report was finalized but never signed and issued. it was simply buried in some

deep hole and covered up with dirt. were it not for whistle-blowers who were in touch with my office, we might think the defense finance and accounting service statements were somehow squeaky clean. i now have the nonendorsement report and other relevant audit work papers, and they tell a far and very different story. the financial statements produced by smaller organizations like the defense finance and accounting services are audited by certified public accounting firms, but this is always done under the watchful eye of the inspector general. so in the end, then, the inspector general must validate those opinions produced by a c.p.a. firm. the firm, irbach, kauhn, and

werlin, u.k.w. for short, examined the defense accounting agency statements that awarded an unqualified opinion or passing grade. the inspector general, by comparison, reached a different opinion. it concluded that those statements did not meet standards. the inspector general announced that it would issue a nonendorsement report, but that report was never issued. and that's why this senator is here on the floor today. what happened to the nonendorsement report? all the evidence appears to indicate that the inspector general may have quashed the nonendorsement report. that assessment is based on the continuing review of all the pertinent documents. i should like to briefly review those facts so my colleagues can understand where i'm coming from. seven red flags have popped up

on my radar screen. red flag number one -- the contract which governs the audits in question is a good place to start because it sets the stage for what followed. the contract was supposed to put the inspector general in the driver's seat. section 3 of the contract clearly specifies that -- quote -- "all deliverables are subject to financial department of defense inspector general approval." the opinion, prepared by the public accounting firm, was the main deliverable. two members of the inspector general's audit team were designated as contracting officer representatives. they had exclusive authority to determine whether the opinion met audit standards and deserved endorsement and to approve invoices for payment. unfortunately, as i will explain, none of the parties involved showed much respect for

this contract. in fact, when the crunch came, they trashed it. red flag number two, the inspector general's decision memorandum and final version of the nonendorsement letter, both dated february the 16th, 2010, contain compelling evidence. the evidence points in just one direction -- there was a lack of credible audit evidence to justify a clean opinion. both the inspector general's audit team and its qualitative methods and analysis division reported major deficiencies in the c.p.a. firm's work. once the inspector general determined that the c.p.a. firm's audit opinion did not meet the prescribed standards, the inspector general's representative prepared a nonendorsement letter and instructed that payments on outstanding invoices be stopped.

those decisions precipitated a classic bureaucratic impasse. red flag number three -- the impasse came to a head at the defense finance and accounting service's audit committee, a meeting held on january the 27th, 2010, where three options were considered. first option, the i.g. would issue a nonendorsement letter. second option, the c.p.a. firm would do more work on accounts payable and undelivered orders issued. and third option, the i.g. would do additional work. just one day later, january the 28th, a senior official from the inspector general's office, miss patty marsh, announced the results of the meeting. miss marsh reported that a consensus was reached.

no additional work would be performed. she then declared that the inspector general's office would issue a nonendorsement letter. red flag number four -- the defense finance and accounting service immediately implemented a series of measures that appeared to bypass and eliminate oversight by the inspector general. in what appeared to be an overt defiance of the inspector general's decision, the accounting agency director of resource management, elaine kingston, in a letter to the accounting firm unilaterally declared that her agency had -- quote -- "proudly achieved an unqualified opinion." kingston's letter was dated february the 19th. at that point, this opinion had been explicitly and

unambiguously rejected by the inspector general and kingston knew it. she also authorized that all disputed invoices be paid. the invoices authorized for payment by miss kingston were the very same ones previously rejected by the inspector general's office -- contract officer representative. their rejection was based on advice from the inspector general's legal counsel. kingston's actions showed blatant disregard for the contract and authorized payments alleged to be fraudulent. then on april the 15th, the central accounting agency's contract officer, normand gomelach, effectively eliminated independent oversight by the inspector general. he issued a letter terminating

the inspector -- the two inspector general contract officer representatives, a known flaw in the contract allowed this to happen. gomelach's termination order was retroactive to january 27, 2010, the very same day the inspector general revealed its intention to issue the nonendorsement letter. it's as if mr. gomelach had superhuman powers and could reach back in time and wipe the nonendorsement report clean off the slate like it never really happened. as one witness put it, the defense finance and accounting service virtually kicked us, the inspector general, out of the contract. and without so much as a whisp r from the duly designated

junkyard dog. red flag number five -- under the circumstances, the stop-work order blessed by the audit committee was not surprising. that it would be accepted and tolerated by the inspector general is astonishing, indeed. the consensus reached was between the three main targets of the audit, the accounting agency, the c.p.a. firm, and the chief financial officer who supervises the central accounting agency. such a consensus, as it was, all appeared to share one common goal -- just simply stop the audit. that is a predictable response from audit targets, especially if there's something to hide. the inspector general's initial response was appropriate. the inspector general's office expressed a willingness to do

more work, and when it became evident that was not a viable option, it declared that a nonendorsement letter would be issued. and, of course, those were good moves. unfortunately, however, the inspector general's office quickly began to bac backpedal d align itself with the the stop-the-audit coalition. first, it issued a stop-work order to the audit team. that occurred february the 4th. then on april the 13th, the i.g. informed the accounting agency by telephone that the nonendorsement report would not be issued. this was, of course, a bolt out of the blue. red flag number six -- in a letter to me dated maybe 26, the inspector general's office attempted to provide a plausible explanation for why this report never saw the light of day. first, the letter suggested that

a formal nonendorsement report was necessary because the inspector general's office had already informed the audit committee of its decision to nonendorse the opinion. is the inspector general implying that miss marsh's verbal nonendorsement announcement constituted de facto or unofficial nonendorsement? if this, indeed, is the case, then how come the central accounting agency still pretends to have earned a clean bill of health? there's something wrong with this reasoning. failing to issue the nonendorsement report left the opinion under a dark cloud, where it remains today. in addition, the inspector general also suggested that doing a mere two to three weeks of additional work to finalize the nonendorsement letter would not have constituted a -- quote -- "good use of audit resources."

that is, it would have been a waste of money. the need for two to three weeks of extra work appears to be a real stretch. i have that nonendorsement letter. it was finished. all it lacks is miss marsh's signature. more importantly, however, the i.g.'s office does not seem to understand either the purpose or the importance of this audit oversight project. for starters, i recommend the inspector general checks -- check section 7 of the contract. it states -- quote -- "the d.o.g. -- d.o.d. o.i.g. will perform oversight of the contractor's work to support the decision about whether to endorse the contractor's opinion report." that was the stated purpose of this costly audit project, to make a decision on endorsement. from day one, however, this was

a significant -- this was a significant effort to resolve a difficult and sensitive questi question. question: did the defense finance and accounting service deserve a clean opinion? simple yes or no. since the focus of this audit was the kingpin of secretary panetta's initiative in the first place makes well -- that makes this work inherently important. red flag number seven, and the last red flag -- one of my main concerns was about this entire matter is that it appears to point to a failure of oversight. so i ask this question: did the inspector general's office cave under pressure and surrender its oversight responsibilities? by accepting and tolerating the

central accounting agency's action, the office of inspector general appears to have allowed a defense department entity to effectively block its ability to perform one of its core missio missions; that is, auditing the books of a key defense agency. if true, this would be a cardinal sin for the inspector general. the central accounting agency allegedly violated the terms of the contract, it allegedly made fraudulent payments, and it unilaterally terminated oversight. yet in the face of such blatant defiance, the inspector general's office turned a blind eye to this challenge. so you have to ask the question: why did the i.g. just roll over? why did the i.g. fail to assert its independent audit authority?

stopping work at this critical juncture does not appear to have been a responsible oversight option. why did top management fail to allow the oversight team to finish its work and render a decision on the opinion? why quit when it was on the very edge of issuing a nonendorsement report on the flawed opinion? was that report quashed to spare the chief financial officer another black eye for the unending accounting screw-ups? or, another question, did the i.g. drop the ball because everyone involved knew these financial statements were in such bad shape they could never pass the test? while we may never know the reasons for what happened, i feel certain, mr. president, about one thing:

on this audit, effective oversight collapsed. now congress and the citizens of this country need some answers, but one is paramount: did the defense finance an accounting service earn a clean opinion? a simple "yes" or "no." as the drive to audit readiness begins in earnest -- and that's under secretary panetta's leadership -- the secretary and the congress need a straight answer right up front. leaving it in limbo is unacceptable. in closing, i would like to emphasize one point. my inquiry is about some very important principles. true, the preparation of these financial statements and all the audit work probably cost the taxpayers somewhere's between $10 million and $20 million. now, to the average american, that's big bucks.

since the audit came to nothing, waste surely occurred. any waste, whatever it is, is unacceptable. but putting important principles at risk was as egregious as the dollar it wastes. what i'm talking about here are ethical standards, audit standards, and the integrity of the audit process. those standards must be protected at all costs. that's one of the inspector general's jobs, to evidence apps to suggest so far. if the integrity and the credibility of that process were undermined, then the effectiveness of one of our primary oversight weapons would be gravely impaired. when and if those lanes are crossed, the inspector general and anyone else involved would be treading on dangerous territory.

if such transgressions occur, there then must be corrective action and accountable. when i complete this oversight investigation, i will submit a final report to the secretary of defense pathetat that. it will -- panetta, it will include considerations for the secretary's consideration. to facilitate this process, i ask that deputy inspector general holbrooke to answer all of my outstanding questions promptly. in other words, i'm getting tired of being jerked around. i yield the floor. and i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

mr. reid: mr. president? the presiding officer: the majority leader. mr. reid: first of all, we must be in a quorum call, right? the presiding officer: the majority leader is correct. mr. reid: i'm learning how this place works. mr. president, i ask unanimous consent the call of the quorum be terminated. the presiding officer: without objection. mr. reid: i ask unanimous consent that the senate proceed to a period of morning business with senators allowed to speak for up to ten minutes each. the presiding officer: without objection. mr. reid: i now ask unanimous consent the senate proceed to h.r. 6118.

the presiding officer: the clerk will report. the clerk: h.r. 6118, an act to amend section 353 of the public health service act and so forth. the presiding officer: is there objection to proceeding to the measure? without objection. mr. reid: mr. president, i now ask that the bill be read a third time pafpbd, the motion to reconsider be -- and passed, the motion to reconsider be laid on the table, there be no intervening action or debate and statements relating to this matter be placed in the record at the appropriate place as if read. the presiding officer: without objection. mr. reid: i ask that we proceed to calendar number 507, h.r. 6131. the presiding officer: the clerk will report. the clerk: calendar number 507, h.r. 6131 an act to extend the undertaking spam, spy ware and fraud enforcement with enforcers beyond borders act of 2006 and for other purposes. the presiding officer: is there objection to proceeding to the measure? without objection. mr. reid: i ask the bill be read a third time, the senate

proceed to a voice vote on passage of this bill. the presiding officer: hearing no further debate all those in favor say aye. all those opposed say no. the ayes appear to have it. the ayes do have it. mr. reid: i ask the motion to reconsider be considered made and laid on the table, there be no intervening action or debate, any statements relating to this matter be placed in the record at the appropriate place as if read. the presiding officer: without objection. the clerk will report. the clerk: s. res. 596, permitting the solicitation of donations in senate buildings for the relief of victims of superstorm sandy. the presiding officer: is there objection to proceeding to the measure? without objection. mr. reid: i ask unanimous consent the resolution be agreed to, the motion to reconsider be laid on the table, there be no intervening action or debate, that any statements related to this matter be placed in the record at the appropriate place as if read. the presiding officer: without objection. mr. reid: i ask unanimous

consent that brian seeley, a detailee on the senate judicial committee, be granted floor privileges for the duration of the 112th congress. the presiding officer: without objection. mr. reid: i now ask unanimous consent that when the senate completes its business today, it adjourn until 9:00 a.m. on thursday, november 15. that following the prayer and pledge, the journal of proceedings be approved to date, the morning hour be deemed expired and the time for the two leaders be reserved for use later in the day. i further ask that the majority leader be recognized at that time. that time following the leader remarks be equally divided and controlled between the two leaders or their designees. at 9:15 tomorrow morning, the senate will proceed to vote on the motion to invoke cloture on s. 3525, support of the act of 2012. further, that the filing deadlines for the second-degree amendments to s. 2535 be at 10:00 p.m. on thursday, tomorrow. that's 9:10 a.m., mr. president. the presiding officer: without

objection. mr. reid: first vote tomorrow will be at 9:15 a.m. on cloture on the sportsman's act. if there is no further business to come before the senate, i ask that it adjourn under the previous order. the presiding officer: the senate stands adjourned until senate stands adjourned until

[inaudible conversations] >> we finish our leadership elections in the world grateful the caucus supported as in the positions we held in the 112 congress. i talked to my caucus about this leadership team, which i so admire and have an so faithful and get to the caucus and to our country. we look forward to meeting the challenges ahead of us. we know with those challenges are. this is the first opportunity we've had to bring the caucus together and to meet with all democratic senators.

the incoming senators are accomplishing their own right for the sending system of this country. and i am very happy to say that we were able to add to the number one in, about one third right democratic caucuses now women and one of the things we did at the special election that we just had, we presented senator murray with 40 red roses and they are really beautiful, representing 20 years in the senate, plus a 20 women now in the united states senate. our incoming freshmen are anxious to do a lot of good things and they said that and that's what they will do. we ran a message led by senator murray from our canada massachusetts. they told us loud and clear debris in our balanced approach. this approach we are going to take to the remainder of this congress and into the new one,

which will begin very, very soon. questions? >> now being a fourth term as majority leader, do you have any thoughts on -- [inaudible] >> i'm just going to continue doing my job. i have not looked at the arithmetic about that stuff. [inaudible] the mac well, everyone should understand we are going to move to change what the republicans have done to make the sun at an institution that has no bearing when lyndon johnson was president or george mitchell was president or even when bill frist was the majority leader. they have made this almost an

impossible task to get things done. the motion to proceed, which they have abused, which they have abuse. do you realize that the farm bill, the postal bill and many other things the cost of the tax bill we passed over here. we can't go to congress. why? because it takes three filibusters. we had to over country filibusters to go to congress. i think that is something we should change. so we are going to make an attempt to change the rules and we are working to make sure we have the votes to do that. >> senator brown of massachusetts yesterday lamented -- [inaudible] >> i'm glad to have a chance to respond to that. i've wanted to do that. i saw during the campaign his plea for bipartisanship. that is a big joke. it's a travesty.

he was on of the most partisan people that never served here. he could have saved citizens united katie could've been the 60th but i'm not in many other things. so i don't need a lecture from him on bipartisanship. he should go look in the mirror. [inaudible] >> i want to tell you earlier you should never chew complement just like when you're in school. i wanted to tell you earlier but didn't have a chance. john kerry is my rent. i work so hard for him when he was running for president. i did everything i could to help him and he came very, very close. there's been no better legislature then i served with. he's been out front on issues

dealing with climate change, and for structure, development and many other things. i don't know any conversations at the president or anyone in the white house has had within any conversation i've had with john kerry. he does not bring up has been secretary of anything. i'll do everything i can to help him if he is chosen. we feel very comfortable if in fact something does happen, we feel comfortable in massachusetts. i think i've heard he you how i feel about scott brown. [inaudible] what do you think his priority should be coming out? >> the president's priorities as he is outlined this campaign, to protect the mail class and small business.

we are one vote away from that accomplishment -- been accomplished. all we have to decide the house of representatives web are built. they should do this to help the american people on all the other issues the president has laid out a program on job creation, we need to do that. the president doesn't need any any -- doesn't need any information from me. he does what is going to do and he's going in the right direction. [inaudible] what do i expect and what about

entitlement cuts? i've made it clearer to anyone who'll listen, including in the white house that i am not going to be part of having social security as part of the sox wouldn't this deficit. i'm happy if we have some independent commission to the great conrad commission doing with the data, social security. social security is not part of the problem. that is one of the immense republicans try to create. it is found for the next many years, but want to make sure people are protected also but it's not going to be part of the budget talks as far as i'm concerned. as you know, we've strengthened medicare with our health care bill. with prolonged the life of it for 12 years. we've saved hundreds of billions of dollars. all that saving went to

recipients. so we are not going to be negotiating things here but i give you my personal feeling about where we need to go. take care of the middle class and have the richest of the rich contributed little bit to helping our economy and the majority of the people who are fortunate and made a lot of money are willing to do this. democrats, independents and republicans support the direction of the president regarding this fiscal cliff issue. thanks, everybody. [inaudible conversations]

[inaudible conversations] >> well, good afternoon, everyone. welcome back. the american people have spoken. a week ago they decided in many ways to continue the status quo with divided government. we have a lot of his challenges confronting us here at the end of the cycle, but i would remind everyone that divided government sometimes has some very important things for the country. and of ronald reagan and tip o'neill reforming social security. ronald reagan and tip oatmeal during the last comprehensive tax reform. bill clinton and republican congress with welfare reform and balanced in the budget. so we look forward to making this divided government productive for the american people and the several wellness we have a lot of challenges here at the end of the year. i'll be meeting with the

president and the other leadership on friday to talk about the way forward and we look forward to being a part of the solution to the significant problems. it is my pleasure now to turn to our newly elected with come as senator cornyn of texas. >> well, things, natch. it's an honor to be elected by my colleagues to serve as the whip, the assistant leader on the republican side. as a drama, fat, we have a lot of very difficult work to do, but we are committed to working with our colleagues across the aisle to solving the nation's urgent problems. we know what those are in a lame duck coming out this if this are going forward. there is no mystery about that commanders say mr. to solutions based on the president's own bipartisan fiscal commission and others that have laid out the roadmap and have shown us the way to address those issues. i am looking forward to working

more closely with my colleagues now in a new capacity. i appreciate their confidence they have placed in me and my view is my role model for that service of senator john cotto who will remain our whip through the end of the year, who has been an outstanding member of the united states senate and someone who is very big shoes to fill. >> i.t. want to think and look forward to record their leadership to do good things for the country. the elections are over with them it's an opportunity for us to turn the page. that means the president of the united states has got to lead. he's got to step forward and help us do it the most immediate crisis such as the fiscal cliff. after the down the road to the things that we can do that will really get this country back on track with the economy growing again, great jobs, put americans back to work. those are all things in our

grasp better insight if we are willing to do the right things to make them hopping. and of course, we all know the issue being debated right now is the issue of taxes. there's so much analysis can assume any economist at groups who studied this carefully in a set if we raise taxes in a down economy, it is going to cost us economic growth next year, 700,000 jobs. it will reduce take-home pay for many americans. that is the wrong direction in which to go but we believe the president if he is willing to have an opportunity to work with republicans. the house republicans do as well to work with him on a solution that will do it the immediate crisis of the fiscal cliff. just as importantly, the long-term fiscal solvency of this country and getting our economy going and getting americans back to work. >> i just want to thank my colleagues were assigned me to continue as chairman of the republican policy committee, to continue to work with my

colleagues on the issues that all americans are concerned about him aside the issues of jobs, the economy, debt and spending. i will continue to provide credible, reliable, accurate and timely information to make sure they can be most effective assiduous major issues facing our country. >> been a member of this group, a real pleasure to be here. i look forward to developing a good working relationship with those who have cameras and. express my gratitude to my colleagues were serving in this capacity. we certainly will work hard to see the good things happen in a political sense for republican senators, but i fully recognize that the success of politics all those governing well. and so i'm looking forward to working with later mcconnell and others within our conference to make sure we make the right decisions on behalf of america so if we do our jobs well is

united states senators, good things will happen in the political realm as well. so we are working hard to develop the right team at the senate campaign committee and i am pleased to tell you that senator robb portman has agreed to be the vice chairman of finance, to help as in acquiring the necessary resources for success and senator elect ted cruz has agreed to serve as the vice chairman for purposes of grassroots operations and political outreach. so we have already in place the beginnings of a team that will work hard to make a difference, not just on behalf of republicans, but on behalf of all americans. thank you very much. >> i'll take a couple questions if there are any. [inaudible] is part of a fortune dollars package. is there anything along the lines of 1.6 trillion sum and

republicans could ultimately agreed to if there were entitlements alongside it? >> i can only echo what the speaker said. i think very correctly last week, republicans believe there is a way to get additional revenue. we also believe that additional revenue should be tagged to the all-night thing that will save the country in the long run and that is reforming entitlement. we know that she can't raise taxes enough to solve the problem. in fact, the big argument over whether or not we should raise tax rates on people above $250,000 would have produced enough revenue to fund the government for six days. so they know it may be a good political talking point, but doesn't deal with the problem. we are open to discussing office of the president. we all know everybody who has studied the issue knows until you make our entitlement

programs that the future demographic of our country, the demographics of our country come you can't possibly solve our long-term debt and deficit problem. we are open to discussing this with the president. we had endless discussions about it last year. american people are chosen divided government again. frequently has done good things for the country and were ready to sit down and talk about it. as you know come in the first may be involved in his friday. >> what changes you make lee, policy wise going for to make sure you pick up seats in 2014? >> the american people have spoken. they voted basically for the status quo we still have a republican house, democratic senate and president. i think they're saying they want us to tackle some of these problems and get them behind us. today is not a day to continue the campaign. we had to turn the campaign

often turn the corner and start working on the serious problems that confront us. we are ready to sit down and get to work. thanks a lot. >> now from "the wall street journal" ceo council, ohio senator -- >> he actually provided over the senate. nowadays the vice president doesn't bother unless the voters need to break the tie. he was there every day and said that's my job. truman never learned anything from fdr or from his dad. it was the transition with zero knowledge. that doesn't happen anymore. got a phone call from the white house. get to the phone right away. so i picked up the phone and at the other end they said get to the white house as soon as you can. so he grabbed his hat and dashed out and he had a car of course.

they gave him a show for when he became vice president. went to the white house, was taken upstairs to the second floor, which was the family floor. was led by eleanor roosevelt and he looked up and she said the area, the is dead. he was in total shock. he said what can i do for you? she said cary, what can we do for you? you're in trouble now. >> now, from "the wall street journal" ceo council, ohio senator robb portland talks about the 2012 elections and the future of the republican party. it's 35 minutes.

[no audio] [no audio] [no audio] -- what was arguably governor romney's finest moment of the campaign. the first debate. it's a thank you very much for being here.

our title today is the future of the republican party. that assumes of course that has one. [laughter] and let's start by talking about the election because he played obviously a crucial role in ohio. i want to get a sense of you're now seeing reports that the campaign was very surprised by the outcome, even right up to the evening of election day because the polls were showing something different. your polls are showing something different than everybody else. if thatcher and how surprised was the campaign? >> will first, it was a very close election in ohio. ohio is one of the key states. even if we want it turns out the electoral vote count would've gone to president obama. we lost by two points in ohio

and recall back in 2004, when john kerry lost to george bush, he would often say both publicly and to me on the floor of the senate, but perhaps the people could fit in the ohio state stadium i'd be president today. so was a very narrow but to read. i do think there are some reasons that are almost technical to some of you understand well. these folks in silicon valley who are good at social media and the democrat side were quite affect this. if you look at the numbers after the fact, the turnout for democrats among their base was better than we expect it and i would say even better than they expected based on their polling and sampling. so you know, they did a better job than we did in getting voters to the polls. and if i got fewer votes than john mccain in ohio still came within two points. the technology included the so-called orca system.

many of you have read about that in the last couple of days, which was the republican get out the vote technology to ensure that we were targeting people getting to the polls. i'm told on election day actually got so many hits around the country as it should have from people saying this person voted this person didn't vote, they thought it was under attack and close down. so for those of you here from again detect elegies field and with interest in politics, we republicans want to talk to you. we need some help. the democratic system i think is called gordon was actually quite effective at mike retargeting. i heard one this morning it was. somebody get the call who is a democrat, who is in law school and police chief, we see you have voted. the information is publicly available. it's at 2:00 on election day,

but your sister at tulane has not voted. could you call her? that is the level at which they were dealing, whereas we frankly were flying blind at that point. part of it is to elegy and not lead to a turnout effort those are impressive on their side that but in the end makes the difference that the increase in turnout among the base democratic party is that two-point difference. second, i do think that as republicans we were not able to take our message, which was the right message in a year and the economy was not doing well and most people were looking for change and take it to the level people thought it made a difference in their lives, for themselves and for their families. this is something that the folks in this room are either nonpartisan or democrats or republicans. i hope you can all agree there certain things we should do in our economy that are growth oriented, including other things

talked about in this campaign. i think we have a difficulty convincing people who were independent voters this is not a turnout issue. this is more dealing with independent voters, those in the middle. it enables us to convince them to so make a difference in their lives. >> on that point, what was the failure they are? clearly that had to be one of the court focuses of the campaign to reach those people with that message. was that a function of the misguided strategy on the campaign? was that just a failure to articulate in the right way by the candidate with the overall campaign? >> i think it's both. for me at the first element of market back to that. the first is a euro spent and particularly outspent early on. although there were not adequate resources to address every issue, some issues were allowed to remain unaddressed and those came back to hurt us in the end because in may, june, july,

august, were outspent in ohio three to one campaign to campaign. super pacs came in but even then it was two to one. so if you are watching tv in columbus, ohio, you see a lot of negative ads. they were almost all negative. they were quite effective and they were about dean and the auto industry bailout and about policy proposals that were mr. rice, but they are pretty set. >> he would raise taxes on the middle class. we can't forget it was on a level playing field until the very end, even after mitt romney which he needed to respond, we're still not on the markets in ohio. we were still being outspent. but that has a cumulative effect. it's difficult. i share the effort in ohio, but i need to find the same thing as true and the other swing states. it's tough to come back from

that. back to your question in a paddy to policy issues and translate in the way people care about, i do think it's a huge challenge for senate with just a lot of people in this room share the same challenge to the extent forgetting partisanship. that she believed in policies that lead to more economic growth and more jobs hurts sometimes to find among current employees it is hard to communicate. in the trade representative so i'll use trade as an example. i would suggest that many of you depend on global trade. in fact, one of my lunch partners talked about the revenues his company gets from global trade and most fortune companies from overseas. ..

>> that is one way of putting

it. yes. a lot of people who are african-american or hispanic, they share all those beliefs and i was just explaining in terms of economic growth. workers of small business, you know, there is a great opportunity for us to explain this in a way that is more acceptable to people and i do that as an opportunity come actually. we were not successful in doing that in 2012. >> is to pursue the minority question, it is not only the share of the hispanic vote fell from 44 for president bush number 27 this time, it is also the asian vote from 42 in 2004 going to 26 this time around. what is it -- i mean, what is your diagnosis of that? is immigration actually a threshold issue here that we need to change on, for example? or is it the size of government

question where these folks are looking for government to play a more active role? >> if you look at the government polling, i don't think it is the size of government issue. i mention that in terms of hispanic and african-american voters who care about small business and growth. they're they are looking for a constructive relationship with government. they are not looking for government to solve their problems. enough people, if they identify themselves come i do think there was a translation problem here literally and figuratively, by not having more spanish language advertisements in other ways to do outreach and the supplanted savanna communities. but just to say this is an inclusive policy. they do affect you and your family. it isn't about wall street, it's about main street.

but it is about our economy in general. so i think that, i think there is a great opportunity here. in terms of hispanic voters, yeah, immigration is part of it. it needs to be addressed. it is also about who the spokespeople are. >> your convention was simply loaded with minority and women spokesman. >> not that many people watched it, to be honest. people say that natural disaster played a big role in the selection, well, shortening the convention in tampa, florida, it is easy to measure the impact. but as paul and i talked about, those of the people who decided in the last seven days, barack obama won a majority.

because they are not happy with the status quo, they end up waiting until the end to decide and hurricane sandy probably had something to do with that. but i think that it is a matter of policy. it is a matter of outreach that includes people speaking for the republican party and a matter of tone. the way to grow this for everybody has to have the policies that were enunciated in the plan that mitt romney laid out. we were just not successful getting it to that level. >> do you think that the comments by the senator the comments by todd akin and richard murdoch -- do they carry through to an international level in the polling for the republicans probably?

>> yes. [laughter] >> again, hard to measure. but the gender gap that we have on our site, which, by the way, it is not something new this year. the numbers are not in yet. but it probably will be comparable to 2008. i'm not saying it's going. but it is a challenge we face as republicans. and i think those comments exacerbated things. >> in previous cycles, a comment by a senator like that would not have echoed through that remark that's true. whatever stupid thing i say today can have an impact on what happens. every gathering and fundraiser, everything that we saw everything is subject to being repeated on the web. that is something that the candidates need to be aware of. frankly, in 2014, republicans have another opportunity on the senate side.

there are 20 democrats up for reelection and i think 10 republicans. clearly based on the numbers to try to get to entitlement reform and we have to have candidates who don't just have the right policy positions but are aware of the fact these kind of comments can determine not just their election, but they can affect the national scene. and we saw that with regard to the missouri commons. >> are you going to run for that committee chair? >> no, i am more focused on the policy side right now. i think our country is in trouble. there are a lot of smart people that are closer than i am to how we are going to react here in washington. we have talked about that during the conference.

but i think the focus has to be dealing with this fiscal cliff and putting a competitive agenda in place. if we don't do that, i believe that we will not be able to get the kind of economic recovery that we all hope for and that we have been lacking over the last few years. >> i wanted to get to the agenda, but i want to address it was one more question about the campaign. and the republican coalition. that is young people. a lot of discussion in the press last week or so. the president is still at about 60% of that vote. is gay marriage, for example, is it one of those threshold issues now that makes the republican party look out of touch with those voters?

and we have to change the way we talk about that issue as republicans? >> yes. >> that is a big concession. a lot of the colleagues would say no, it was a close election, you know, two percentage point, their turnout was better and we don't need to change a thing. >> it was a close election, the country is divided. if you look at just the turnout issue, they can explain the results in ohio and florida. and perhaps virginia. it was a close election. but the reality is that, you know, the party gets that gets less than 30% of the hispanic vote and less than 40% of the vote of those people who are coming up through the system,

that the party that needs to adjust. and i have talked about some of that today. some of this policy, a lot of the tone and taking our strengths, and taking our growth and opportunity and translating that in a way that people understand and appreciate. you are looking at a 50% unemployment rate of matching your degree to the job that you want. you'd think the deficit would be an issue. those issues are ones that we are not able to communicate in a way that was effective, clearly, to when the majority of the vote. some of these social issues are also very important to that generation. we look at those issues differently than those of our generation. >> it is a different attitude. i think you have to acknowledge that and deal with it?

does the president have a mandate to raise taxes, and i ask because you are minority leader, the leader in the senate, mitch mcconnell, said that he does not believe that that is his mandate. >> as you know, i am a fierce advocate for tax reform. america is falling behind in terms of our competitive position. one of the main reasons is our tax system is antiquated and inefficient. there are ways to fix it. every other country in the world, by the way, have transformed unreformed and lower the rates. we haven't touched it since ronald reagan, really, in 1986. bill clinton didn't do so at one point, but we haven't done anything to reform are cool.

this capital investment and the people, to follow our country in the competitive environment, and taxes is one of them. when you do that, you will get more revenue. it's guaranteed. again, it is sort of that thing we were talking about earlier. this is an opportunity for us as a country. and if you look at the congressional budget office analysis, what tax reform could mean in terms of macroeconomic impact of growth, i mean, all of them will lead to more growth, whether it is corporate tax reform or individual tax reform. >> he said this was fought over in the campaign and we fought over tax rates. rising tax rates. jay carney, the white house press secretary did say that the president will veto any bill that extends the current tax rates. so he insists that tax rates go up those making over $250,000.

what would your recommendation be to the republican party in the senate? >> first, i believe the resident does have a detailed view of the press secretary. i like the president's comments better than jay carney's comments. i think jay carney was maybe, i think he was a little behind the curtain. i hope. it makes no sense whatsoever to take our existing code and talk about adding layers on top of this to create a disincentive for small businesses to invest. i have to tell you, i would be very concerned about that. i'm a huge advocate of tax reform. what does that mean? that does mean that while you lower rates, you do things in terms of the preferences of the code and this is deductions and credits and exemptions exemptions that allocate resources efficiently. right, left, or center.

we would all agree that our current code is inefficient. it is a great opportunity for us. for us to say instead what we will do is take this antiquated code and we're going to go more taxes on top of it at a time when roughly 50% of the income is going to be paid by a pass-through entity that is deciding, am i going to add more people as the economy begins to show life? am i going to make that investment and take that risk? or am i going to pay more to uncle sam? i grew up in a company like that. it makes sense. so i hope the president will see the congressional budget office analysis. he just talked about us losing 3 million jobs next year. if we don't deal with the fiscal cliff, 3.4 million jobs, to be exact. the analysis is 700,000 jobs

last. the economic growth numbers were stronger than they are now, and this makes no sense. why would we want to do that? >> because the white house economists don't believe that tax rates matter in what you just said. >> they clearly matter. there is an honest debate about how much this matters or do other things. i think it is important. you believe and not, and you look at what this tax increase would do to the economy versus its impact on the deficit, it's kind of hard to argue with this makes sense economically. i'm not saying that we won't end up with this discussion and debate, and who knows at the end of the year what happens -- the end of this calendar year, but i'm very hopeful that he will look at us this and say, look, if you raise taxes, especially on these small-business entrepreneurs and a lot of folks

in the room or at the top rate, less than 10% of the deficit. when we hear people talk about it, in terms of the difference between the surpluses end we ended up in the last decade. it was the bush tax cuts in 2001, the deficits were 4%. that the cbo number, not mine. even if you assume it was economic growth associated with that, but i don't assume, but if you take that point of view, we need to deal with this issue honestly. i think what we ought to say is let's do tax reform, let's set a date. how about six months. it's aggressive and ambitious. but i think july 4 is a nice day for us to do it, it's our independence day. let's make a commitment now. we will have the current code for in place for six months at that time. we can deal with these bigger issues that we have to deal with. in the meantime, let's make a down payment.

spending cuts a deal with the sequester, leading to the six month. that would be in the neighborhood of 110 billion for six months in somewhere between. let's make that down payment now. let's have a six-month period were congress does its work in january and let's do it through the normal process and let's come up with attacks are reform that everyone agrees to in general, but the devil is in the details. if we don't deal with the entitlement problem, we have done nothing to do with our debt and deficit. let's put congress on the spot. someone say that it's kicking the can down the road. some would say that's too short overview. but my view is that congress can do it if they put their mind to

it. i sat on the super committee which was not so super. >> yes. >> i was the ironman. on the super committee. you know, each of us had a superhero and the ironman got kind of rusty in that process. but it was, you know, very disappointing. but the reality is that our president did not weigh in the issue immediately upon our first meeting. he gave democrats no cover. he showed no leadership. he did not help entitlement reform. he needs to be part of this process and that would make a huge difference. without leadership, that would never happen. the executive branch doesn't show leadership, in terms of these major changes, they have to be done. >> let's open it up to any questions. >> please go to the microphone. >> [inaudible question] >> in terms of economics.

>> [inaudible question] >> well, when you asked the question, are you a liberal or a moderate or a conservative, most americans are moderate conservatives by far. i don't know elastomers are,. >> it's about the mid 20s. >> it's no higher than was the previous time. people don't consider themselves to be liberal, they considered to be moderates or conservatives. when you ask people what they think about the role of government, the size and scope of government. for all of the colleagues on the republican side, they say we have lost the country because so many people want to be dependent upon government. rather than the private sector to create opportunity. it is not true. yes, people are having a hard time. they would like to have some help. but they want to have a hand up and not a hand down. that is still very much of the

american epic. people are willing to work. they are willing to get a fair shake for hard work. my state is still a center-right state. if you ask people what they think. we were not successful this last go around. understanding the policies that mitt romney would know, not a radical departure, which is what the democrats for trade, but having america be true to his store values and principles. i would say uniquely, it has made it uniquely capable of creating private sector job growth and through relying on government not to create jobs but to make the environment as a

environment for success. i believe this is a center-right country despite the results of the election. >> yes, sir. right there. >> i would would like to get you to comment back to me. i agree. i think we are a center-right country. i do not think the perception is out there but the republican party is a center-right party. the perception is much further right than that. not that either party are good, they are unbalanced. i have five daughters on the age of 30 years old that were deeply disappointed in the last four years. but they really were conflicted on how to vote, because of that perception. on one side. i wonder as we talk about the future of the republican party, we need strong port of systems. you know, what are your comments on our?

>> i agree. i think your daughters are probably that demographic that both sides were looking to and they probably got a call from who knows, joe biden on election day. [laughter] asking how you voted yet, you know, we love you, god love you. [laughter] i think you are right. i think that is a perception that a lot of people have. i think that is one of the challenges that we have. you know, although your daughters are in their 30s and not in their teenagers and 20s as mine are, social media is also so much more important to them. so it's not just this new technology that we talk about gordon versus orban howell you reach people where they live. a lot of seniors, for that matter your we were less effective at communicating not just our policy proposals, but

we were too your point. this broader side, having them be around the country within hours or minutes. >> yes, sir? >> my question about this is this. it seems to me that the policies that you have identified as needing change might have been the policies that were adopted as a necessity to get through the primaries. how do you think the primary system can change to allow a candidate to come through that might represent a center-right as opposed to the far right. it seems to me that people might say that governor romney was among the most centrist of the candidates, but he passed through that primary system. how can i be adjusted?

>> i think on the democrat and republican side, we tried to talk about that. until you go to a national primary, which no one is talking seriously about, you're going to have this inefficiency. i was with somebody last night they told me that there were some i will republicans who were recently meeting, saying that we have to be careful, people won't even come participate in our caucus system again, because of the broad a term of the republican party. that is state-by-state system, we need to be careful of people that are probably representing the system. our party is quite a continuing to go through that process. the president had no primary, obviously, he was free to have a rose garden strategy first, and at the same time, a moment romney on the way to ohio and virginia and other states.

we didn't have that luxury. you'll recall during the primary that herman cain was going to be candidate. but perry was going to be the candidate. newt gingrich was going to be our candidate. i don't want to leave out michele bachmann, she was going to be for a while too, but it was just so up and down. you know, that is part of the way our system works. our democratic system. state-by-state, and you have to fight for it. every voter in new hampshire but a personal visit with mitt romney and michele bachmann, you know, it forces you to do that, where is the national primary you wouldn't have that opportunity and the candidates wouldn't have that challenge after being in these town hall meetings. there are good and bad parts to it. it could create some challenges. no question.

>> on the super pacs on the republican side, they probably spent over $700 million, something like that. and it looks like, you know, it achieves almost nothing in terms of electing candidates that they targeted. so where does that leave the system? what does it say about anything? it is a pretty stunning outcome. without much money with no return on the. >> a couple of thoughts. it was about the fact that, you know, there's a lot of discussion about what citizens united meant for this campaign, the super pacs and so on.

making use of the top 10 outside groups that were involved, the ones that were more pro-republican or romney, the spending was one the other side. partly because unions are liable to take dues from members now and use it to influence people outside of the union membership. so just so people understand the context of the question, it's not that the other side wasn't spending a law, too, and in fact more when you have it add it up. is that accurate? >> i think the unions channel things into voter turnout and the other big issue was obama advertising in july -- may through july from which nobody really responded to, which, in my view, defined mitt romney in very negative terms. >> it did. as i said earlier, it is tough to unravel that. so to your point, it probably didn't make a big difference.

if it they hadn't been out there on the republican side, they would've been up there anyway. you would've seen the country that is not too evenly divided. advertising dollars would've meant larger dolling and $10 for them in the states. i will also say that we cannot coordinate with the campaign and someone else helping you, sometimes the ads are less helpful. some of them are good, some of them or were not. some of them were off message. in your business, thinking about it with your marketing efforts, if you had to have a marketing team within your business, but also an outside marketing team, you know, how would you feel about your results? probably not very good. because you want to be able to, you know, target it and develop your message appropriately. so i'm not saying that it was

not without some impact. it can have a lot of impact. but it would've been much more impactful if it had been run through the campaign. and that would be consistent with the campaign message. >> i'm being told that that is the end of the session. but one bit of housekeeping, we are going to have dessert and coffee downstairs. where we have been having meetings right outside of the session. we will meet half way done at 2:30 p.m. i want to thank senator portman, in particular, for coming. it has been great to have you here. i know taking your time is not the most fun kind of questions to answer week after the election. so thank you very much, sir. >> coming up tonight, a house energy and commerce subcommittee hears testimony on the fungal meningitis outbreak linked to a

massachusetts company. the defense department and holds a briefing on actions taken after an investigation into misconduct. at laflin air force base in san antonio. that is followed by an interview with outgoing house services member, congressman barney frank. today's of nonfiction books this weekend. your calls, e-mails, and tweets. many featured authors including jake tapper and christopher hitchens book, mortality. live coverage starts on saturday morning at 10:00 a.m. eastern on sunday at noon on c-span2's booktv. join us online